Pharmaceutical Industry Faces Continued Layoffs and Restructuring Amid Strategic Shifts

The pharmaceutical and biotech sectors continue to grapple with widespread layoffs and restructuring efforts as companies realign their priorities and navigate a challenging economic landscape. Recent weeks have seen numerous organizations announce workforce reductions and strategic pivots, highlighting ongoing volatility in the industry.

Major Players Implement Cost-Cutting Measures

Several large pharmaceutical companies have revealed plans for significant job cuts as part of broader cost-saving initiatives. Merck announced it could let go of about 6,000 employees globally as part of a multiyear process affecting around 8% of its workforce. The move is part of Merck's recently announced $3 billion cost-cutting push, with savings to be channeled into R&D and supporting the launch of up to 20 new products.

Similarly, Bristol Myers Squibb disclosed an additional $2 billion in planned savings through 2027, on top of an ongoing program targeting $1.5 billion in cost cuts by the end of 2025. The dramatic restructuring at BMS has involved layoffs across multiple sites, including 223 employees in Lawrenceville, New Jersey.

Novartis is reducing its U.S. workforce by 427 employees at its headquarters in East Hanover, New Jersey. These cuts follow the company's December 2024 decision to let go of 330 employees as it closed sites in Germany and Boston acquired from MorphoSys.

Biotech Firms Face Tough Decisions Amid Funding Challenges

Smaller biotech companies have not been spared from the industry-wide belt-tightening. Intellia Therapeutics announced a 27% reduction in its workforce as part of a reorganization program focused on high-value programs. The company will discontinue development of its NTLA-3001 therapy for alpha-1 antitrypsin deficiency-associated lung disease.

IGM Biosciences revealed plans to cut 73% of its workforce and halt development of two autoimmune drug candidates. The layoffs will affect 100 employees, leaving the company with just 37 staff members.

Passage Bio announced a 55% workforce reduction to extend its cash runway, potentially affecting about 32 people and leaving the company with 26 employees. The cuts are part of a broader strategy to prioritize development of its PBFT02 program.

Strategic Shifts and Pipeline Reprioritization

Many companies are using layoffs as an opportunity to refocus their efforts on core priorities. Galapagos announced plans to split into two entities by mid-2025 and cut 40% of its workforce, affecting about 300 employees across its European operations. The reorganization will result in the closure of its site in France and decreased staff in Belgium.

CytomX Therapeutics is cutting about 40% of its employees to direct capital resources to its clinical programs, particularly the development of CX-2051 for advanced metastatic colorectal cancer. The move affects 46 people, likely leaving the biotech with fewer than 70 employees.

Repare Therapeutics disclosed plans to cut an unspecified number of staff as it reprioritizes its pipeline to focus on advancing its Phase I clinical programs RP-1664 and RP-3467. The Quebec-based biotech expects the headcount reductions will help extend its cash runway into mid-2027.

As the pharmaceutical industry continues to evolve, companies are being forced to make difficult decisions to streamline operations, conserve resources, and position themselves for future growth. The ongoing wave of layoffs and restructuring efforts underscores the challenges facing the sector as it adapts to changing market dynamics and scientific advancements.